The Wine Industry Can And Should Be Doing More To Market To Gen X -- And Everyone

As an agricultural product, wine is dependent on a somewhat certain set of natural conditions in order for the grapes it is made from to reach maturity and ripeness prior to being harvested. In recent years, the wine industry around the world has been faced with a series of challenges that includes wildfires, hail, frost, flooding, and abnormal weather cycles. As a category of consumer packaged goods, wine is also subject to how it is packaged and marketed and then to the whims of the buying public.

For good reason, the United States wine industry has been feeling good about itself almost to the point of invincibility in recent years. Sales of wine to the baby boom generation, while expected to decline as its members age, is still going strong. The next big target of the wine industry, the millennial generation, is coming up on its strongest point of earning and spending power. It seems the entire industry and everyone in its orbit was shocked by the findings of Silicon Valley Bank’s State of the Wine Industry Report 2019, authored by Rob McMillan, Executive Vice President and founder of SVB’s wine division, which predicted a downturn in the sale of wines to millennials. According to industry data summarized in the report:

Beginning in 1994, the US wine business experienced a long trend of increasing consumption and consistently higher price points.”

“Twenty-five years later, the US is the largest wine-consuming country in the world,giving US producers an amazing home-court advantage. That said, while the total dollar sales of wine in the US is still growing, the rate of growth is flattening

“Just like the early 1990s when the boomers made their retail presence obvious, driving record wine sales, the huge millennial generation, all over 21 years of age now, is moving into their careers and higher-spending years. They will surpass the baby boomers as the nation’s largest demographic by pure numbers in 2019.”

Pia Mara Finkell, Senior Vice President, Integrated Communications and Business Development at R\West, an integrated brand agency, recently told us in an interview, “Millennials have been the hot topic at every marketing conference I’ve attended since they were old enough to drink. You’d walk out stumbling in a drinking game with a shot for every time “Millennial” was mentioned at any of the major conferences.”

However, SVB’s report includes data showing that millennials are not adopting the wine lifestyle as strongly as winemakers and wine marketers were hoping. As we have previously quoted, McMillan’s report for SVB stated, “Millennials aren’t yet embracing wine consumption as many had predicted. Damaged financial capacity is a major contributor, but cannabis legalization is another factor explaining their slow adoption of wine.”

All of this made us wonder: What happened to Generation X in the world of wine marketing? As the wine industry begins to move beyond baby boomers, all we have been hearing about in the industry are millennials, millennials, millennials. In the words of a Facebook commenter regarding another article we wrote on the topic, “Generation X is the Jan Brady of generations.” It really does seem that Generation X, now aged 38 to 53, is all but being ignored by a sector that needs its support if it does not want to fall prey to a disaster of its own making.

With an eye towards learning what efforts the wine industry is making towards connecting with and selling wine to Gen X, we spoke with wine industry thought leaders, including those working in consulting, branding, public relations, and marketing. While several people that we spoke with were able to provide concrete examples of how their brands were reaching “the forgotten generation,” there are many in the industry who think that as a whole the world of wine could be and should be doing more. Paul Mabray, CEO of Emetry, A Brand Insights Company, and Rebecca Hopkins, Communications Strategist, Folio Wine Partners and Founder of A Balanced Glass, a US-based web platform that aims to support the mental and physical health of wine professionals around the globe, both offered insight into what the wine industry is doing well and in which areas it needs to improve.

World Wine Guys: What do you see the wine industry doing in general to capture and retain Generation X?

Paul Mabray: Not much to be candid. But to be fair, many of the things that appeal to millennials and boomers are universal changes being discussed and somewhat implemented by the industry. Better experiences, investing in digital, consumer insights, new routes to market, improving our wine clubs, new blends, augmented reality and more are things that are not single generational but are cross generational.

WWG: Through which media do you think Gen X can best be captured?

PM: This is an interesting question. There are two absolutes that drive this:

Most first world countries are digital cultures (e-commerce, search, social, mobile) across all generations. Reaching people digitally is always the best answer for any generation that is native to that medium.

The world has become an infinitely noisy place. Reaching customers is not a single channel effort but a perpetual omni-channel exercise. That being said there is one absolute, we are in the age of the customer and everything should be viewed through the lens of, “How do we create better customer experiences and exchange better value with customers of all generations?”

WWG: Have you done any research that you can share into the wine buying habits of Gen X?

PM: I think Rob McMillan's [Silicon Valley Bank’s State of the Wine Industry Report 2019]is the best effort. I think wine needs to be classified into pricing and cohort:

Pricing: What do different brands at different price points do to appeal to Gen X? This is especially true for higher priced wines since Gen X is in the affluence curve, that peak life period where we have more disposable income and attention to spend on interests. That's why Gen X is leading growth for DTC (direct to consumer) sales and wines over twenty dollars. The one key difference is that the days of the single or small pool of power influencers such as [Robert] Parker is gone. We have infinite information at our fingertips, and e-commerce has made the world flat.

Cohort: How do we inspire generations to move from wine aware to wine lovers? That's a multi-generational problem and applies to any and all age groups if they have any interest in wine. There are a couple of good examples on my company website.

World Wine Guys: What do you see the wine industry doing in general to capture and retain Generation X?

Rebecca Hopkins: The industry is using the time-honored tactics including sampling at consumer events and in-store tastings as a way to engage Gen X. The more successful brands are engaging online through visual storytelling mediums and community platforms such as Instagram, FaceBook and YouTube. Luckily for the industry, like baby boomers, Generation X is brand and category loyal choosing to experiment within the beverage category and between domestic and imported wine styles.

WWG: Through which media do you think Gen X can best be captured

RH: Gen X by nature has been well versed in learning wine though the traditional cues – visiting wineries, joining and being engaged as active wine club and DTC members, attending wine events and furthering their own education through professional and semi-professional means. Traditional media mastheads are still relevant, such as Wine Enthusiast and Food and Wine, but are more commonly accessed through digital means rather than print.

Brand storytelling and experience is critical to this generation, but many [may] explore the stories behind the brands possibly more than the previous generation.

WWG: How do you think Gen X differs from the baby boom and millennial generations?

RH: Anecdotally I would say Gen X is a more adventurous demographic for country of origin wine than baby boomers. I would suggest it’s reflected in the growth of the imported wine category, wine formats and cross-category purchasing. Probably [larger importers or producers] have better intel on that than we do.

Also Gen X is the first generation to use digital in their wine purchasing, consumption and research means. Yes, millennials have changed the concept of “influence” as it relates to “experts” in wine, but…Gen X [has been involved] in the start of this tide turning, such as the Gen X sommeliers and buyers who started the SOMM movement.

This is the fourth and final in a series of conversations with wine industry thought leaders on the subject of marketing to baby boomers, Generation X, and millennials. To read interviews with Marcy Whitman, Senior Vice President for Marketing and Brand Development at Palm Bay International, a wine importer based in New York, and Kate McManus, Vice President of Marketing for Delicato Family Wines, a wine producer based in California, click here.For conversations with John Truchard, co-founder and CEO of JaM Cellars in Napa Valley, and Gino Colangelo, President of Colangelo & Partners, a public relations agency in New York that also has offices in San Francisco, click here. And to learn what two Gen Xers, Iain Douglas, Chief Marketing Officer, Deutsch Family Wine & Spirits and Pia Mara Finkell, Senior Vice President, Integrated Communications and Business Development at R\West, an integrated brand agency, said on the topic, click here.